Adam Peggs

Fixing the UK economy

Adam Peggs
Fixing the UK economy

The IPPR’s long-awaited Economic Justice report has arrived. It raises some critical questions about how unjust the UK economy has become and how much scope there is for a radical politics led by the Labour Left . It’s also a sign that long after the recession has ended the economy is still failing for a vast number of people.

The proposals also say a lot about how much the debate around economic policy has changed in the last three years, largely owing to Brexit and the rise of the Labour Left but also to a wider pushback against the economic status quo worldwide.

So how badly are ordinary people being fleeced? There are examples which might, often superficially, suggest things are going relatively well. We live in a wealthy country, unemployment is relatively low - though the reality is more complicated, austerity may be about to wind down and the economy isn’t exactly flatlining. But the economic recovery has been an absolute catastrophe and has underscored the moral failings of British capitalism.

The poorest tenth of the UK population haven’t had an increase in their income since 2000, according to the government’s own figures, that’s no economic progress for several million people for the duration of 18 years. Combining this with IFS data from 1991, you get the strong impression that the incomes of this group have scarcely grown in real terms since 1979. Given the economy is growing and unemployment is down you might expect this situation to be improving, both for the poorest tenth and more widely, but looking across at different indicators there is little to be hopeful about. Wages still stagnate, inequality increases and poverty flits between rising and remaining at the same level.

A whopping 3 million people are reportedly at risk of under-nourishment, a sign of major insecurities and income shortages for some, rather than a dearth of food. On another front, absolute housing poverty in Britain is now higher than in either 1990 or 1999, with more people living in overcrowded housing than at the turn of the millennium. While the number of working families below the poverty continues to rise. It’s as if those who distribute our economic resources, primarily those who own firms and capital, simply aren’t sharing with the bulk of the population.

According to the Joseph Rowntree Foundation, Britain appears to be undergoing the first sustained rises in both child and pensioner poverty in the last twenty years. Other methodologies would suggest that these rises are on top of previous rises between 1999 and 2013. Technology advances, people often work harder and longer, but those gains are rarely felt by substantial sections of the population.

The longer this current economic model lives on, the more working class living standards seem to slide. This should be a reminder that those who argue that free markets are curing poverty are peddling rubbish, whether it be in the Global South where absolute poverty likely isn’t falling or in Britain where it is more unrelenting than ever.

Vital to the age-old but growing issue of widespread poverty in the UK is our momentous levels of economic inequality. It’s this inequality that is serving as a key driver of persistent poverty. It isn’t just hitting people in the wallet but continuing to concentrate more and more power into the hands of a small few, especially those who rely on the labour of working people as the source of their riches.

We are talking about problems which are embedded in the very structure of the economy, driven by the relationship between working class earners and the industrial aristocracy. Though the commission on Economic Justice puts forward coherent solutions to the excesses of our current model, it doesn’t quite begin to recognise the depth of the issue. Nor does it point past ameliorative measures and in the direction of a truly solidaristic society, which is why the left should not go so far as considering it a blueprint.

This economic recovery has led to a notable growth in support for socialism, though perhaps with a significant caveat. When the British public say they prefer socialism to capitalism, they likely don’t mean that in terms of the more radical traditions, but in terms of the leftward flank of social democracy. Some on the centre-left are waking up to this, it could be the basis of a broader alliance against rampant inequality and poverty. However it’s worth noting this isn’t enough, it’s not quite the fundamental shift in the balance of wealth and power that we need.

When Britain’s current economic model can only deliver for one side of a class divide, it should be proof enough to discard that model, but it should also be a sign that there needs to be more ambitious discussion of what kind of society we would like to build for the future.